Current USERX price = 7.34, Up 67 cents (10%) since the last report 3 weeks ago.
Introduction (repeated from prior Reports):
I have been using my unique SKI indices to predict price changes in the precious metals' market for more than two decades. And my indices continue to mark the critical points. I have initiated a subscription website since 1/13/06 (yes, Friday the 13th) after having posted free updates for years at www.321gold.com. SKI is a timing service; although almost everyone seems to believe that market timing is impossible, that IS what the SKI indices have done for 36 years.
The SKI indices contain short-term (16-20 trading days), intermediate-term (35-39 trading days), and long-term (92-96 trading days) indices. A more comprehensive description of these mathematical indices and their history is found here. Basically, the indices compare today's price to prices from a specified prior time period. The name of the index specifies the time period (e.g., 92-96 index = compare today's price to prices from 96, 95, 94, 93, and 92 trading days earlier). Although I use the oldest gold mutual fund, USERX, for analyses, the predictions are applicable to the broad precious metals' market. I do not recommend or analyze specific stocks, but my subscribers from around the world regularly discuss individual issues on our Forum. In addition to the truly unique SKI indices, I also use "run patterns" to guesstimate turning points in the precious metals' market. A "run" refers to a pattern of daily up and down market closing prices. If the market has 3 consecutive days of higher closing prices, the run is "3 up". If prices then decline for 2 consecutive days, the run becomes "3 up and 2 down". If prices then close higher the next day, the run changes to "2 down and 1 up". Some people have referred to run patterns as "worms". A run pattern is only completed after the direction of closing prices has changed. I have compiled a listing of every run pattern that has ever occurred and generated probabilities that the end of the run marks a high or a low, moderated by the indices themselves.
The last SKI Report (written on January 20, 2019) described how: (1) The USERX 35-39 and 92-96 index buy signals on 1/03/19 and 1/04/19, respectively, had marked an exact high at USERX 7.07 but had not sold and remained bullish, and (2) The master long-term USERX 218-222 index had done a quick buy on 1/10/19 at USERX 6.97 but then had executed a quick sell signal on 1/14/19 at USERX 6.88. The 221 index’s sell signal ended the long-term SKI 663 index’s buy signal from the rather exact low on 11/14/18 at USERX 6.28. The 221 index’s sell signal was “ominously bearish” but it could re-buy again quickly within the subsequent 11 trading days.
After that last report, the gold stocks continued to go sideways, while USERX continued to DECLINE a little. USERX declined from 6.67 to 6.64 (on 1/22/19), then 6.64 (on 1/23/19), and then 6.60 (on 1/24/19). The decline had reached an overly-extended/stretched run pattern of 1 Up and 10 Down days. The run down was perfectly symmetrical with the 10-day down run EXACTLY 92-96 trading days earlier (!) at the exact low on 9/11/18 at USERX 6.34.
The gold stocks surged higher the next day (1/25/19). The 3.8% USERX 1-day rise to 6.85 moved the master 221 index towards its re-buy signal (the index’s back prices from 218-222 trading days earlier were EXACTLY at USERX 6.85). THE PERFECT SYMMETRY COUPLED WITH THE MOVE BACK UP TO THE 221 INDEX CAUSED JEFF TO RECOMMEND RE-BUYING WHAT WAS SOLD FOR SAFETY ON THE 1/14/19 221 INDEX’S SELL SIGNAL if the gold stocks rose again the next day. And the gold stocks did rise the next day (1/26/19) to USERX 6.97. I/We therefore got whipsawed a little by selling some at USERX 6.88 and re-buying at 6.97, but discipline requires that one do that EVERY time in order to limit losses. The 35-39 and 92-96 indices remained on their early January buy signals but had still marked an exact wave top on 1/03/19-1/04/19.
The gold stocks continued to surge higher for another 3 trading days after the re-buy. The 5-day 13% USERX rise into 1/31/19 executed a new 221 index buy signal plus a long-term 442 index buy signal. It also caused the HUI’s 16-20 index to execute a RESISTANCE sell signal (from its 16-20 index buy signal at the exact closing HUI low on 1/18/19). The USERX was 10 Down and 5 Up into 1/31/19 and the historical run pattern data since 1974 showed that such runs higher have NEVER gone extended to more than 5 trading days. Therefore, the SKI indices provided multiple USERX and HUI index signals plus a run pattern marking 1/30/19-2/01/19 as a major technical point at USERX 7.47.
The multiple 35-39 and 92-96 index signals on 1/03/19-1/04/19 were supposed to mark some type of high short-term vs. long-term but also could have marked a significant intermediate-term bullish break-out. We now know that they marked the exact short-term high but the gold stocks eventually surged higher into even more major long-term 221 and 442 index signals on 1/31/19 (plus a HUI resistance 16-20 index sell signal). Those signals were also likely to mark at least a short-term high but also could have marked an even larger long-term bullish break-out!
What Jeff once again knows is that if the 221 index generates a new sell signal, the 1/31/19 technical point may very well have marked a MAJOR TOP. It is very close to such a sell signal even though USERX has only dropped to 7.34 as of this past Friday (2/08/19). What will Jeff have to do and recommend if the 221 index sells? Sell and consider a short position using another 221 index buy signal as a buy-spot. I did not suggest shorting at the prior 22 index sell signal, but the combination of 221 index AND 442 index signals on 1/30/19-2/01/19 should be marking an even more powerful technical spot than the early January 35-39 and 92-96 index signals.
I understand that it may sound like I am “touting” the SKI indices that have marked the technical spots since 1974, but how can one not believe that the indices (for some reason) capture the true “nature” of the gold stock market? The index signals are objective/mathematical with the formula provided for anyone to use and the entire history of the index signals since 2006 on the website….
Best Wishes, Jeff
If you are interested in following and learning more about the SKI indices, I'll write another Report in three weeks or you can shell out the big bucks for a SKI subscription. Weekly Updates are available by subscribing for a month (or longer if you're wise and cheap enough to want to save money) at my website www.skigoldstocks.com for the princely sum of $25 (for a one month subscription) or more ($200 for an annual subscription). I also provide more frequent intra-week daily messages/alerts at a slightly higher price along with access to our informative Forum.